GMR Infra allots 13 mn shares to IDFC

GMR Infrastructure Ltd (GIL), the Bangalore-based global infrastructure major with interests in airports, energy, highways and urban infrastructure, has allotted 13 million fully paid up equity shares of Rs 2 each at a premium of Rs 113 to IDFC Infrastructure Fund - India Development Fund on preferential basis.

After the decision taken by the shareholders of GIL at the Extraordinary General Meeting (EGM) on June 9, 2009, the company’s management committee of the board of directors in their meeting on June 19, 2009, allotted these shares in exchange for 46.8 million shares, totaling 3.9 per cent in Delhi International Airport Ltd (DIAL), a subsidiary of GMR Infrastructure, held by IDF and Rs 48.75 crore advance towards share application money paid by IDF to DIAL. With this transaction, GMR Infrastructure’s stake in DIAL has gone up to 54 per cent.

In 2006, IDFC had made an application to GMR for an allotment of 46.8 million shares or 3.9 per cent of the total equity at Rs 10 each per share in DIAL and had paid a total of Rs 96 crore.

A Subba Rao, president and CFO, GMR Group said, “Since DIAL is not a listed company and IDFC had no way to sell its stake and book profits, they opted to sell the stake to GMR Infrastructure in exchange for an allotment of 13 million shares totaling 0.71 per cent of the equity. The deal was a mutually negotiated deal. We agreed to give them 1.5 times of their initial investment, which is Rs 149 crore.”

However, going by the current average market price of GMR Infrastructure, the total value of 13 million shares works out to Rs 182 crore. “We found the deal advantageous to us as an additional 3.9 per cent stake in DIAL will help us increase our value in the company. We have got this additional stake at much lesser price than the current valuation of DIAL. The total value of 3.9 per cent stake in DIAL is worth Rs 3,838 crore,” he said.

As a result of this transaction, the issued capital of the company increased to 1.83 billion equity shares of Rs 2 each.

IDFC through its various investment arms and through private equity has been a long time investor in GMR’s various infrastructure development activities including being an early investor in its power business.

As per Securities and Exchange Board of India (Sebi) norms there will be one year lock-in period for the shares offered to IDFC.